Sanjeev Mantri, MD & CEO, ICICI Lombard General Insurance
The underwriting loss of the general insurer narrowed to Rs 152.3 crore from Rs 283.44 crore in Q3 FY24. Among portfolios, except Fire and Crop , rest of the portfolios like Marine , Health and Motor have recorded underwriting losses during the reporting quarter
New Delhi: ICICI Lombard General insurance, the country’s second largest general insurer, on Friday reported a 68 per cent rise in its net profit at Rs 724 crore in the three months ended December 2024.
The company had earned a net profit of Rs 431 crore in the same period a year ago.
Its gross direct premium income for the quarter declined to Rs 6,214 crore against Rs 6,230 crore in the year-ago period.
The slippage in gross premium of our company was due to the fact that general insurers are mandated to recognize premium for long-term products on a 1/n basis effective October 1, 2024, said Sanjeev Mantri,MD & CEO, ICICI Lombard General Insurance while announcing the company’s results.
The IRDAI has mandated general insurers to account for long-term products on a 1/N basis effective from October 1, 2024. This means that insurers must report long-term premiums over the risk period using the 1/N method. In this method, (N) is the number of days in the policy.
The underwriting loss of the general insurer narrowed to Rs 152.3 crore from Rs 283.44 crore in Q3 FY24.
Among portfolios, except Fire and Crop , rest of the portfolios like Marine , Health and Motor have recorded underwriting losses during the reporting quarter.
However, with investment income, Motor portfolio posted an operating profit ,
The incurred claim ratio of the general insurer stood at 65.8 per cent as compared to 70 per cent in the year-ago period.
The combined ratio of the company improved to 102.7 per cent in Q3FY25 from 103.6 per cent in Q3FY24..
Mantri said the company’s Commercial line segment de-grew at 8.4%. Within this, the Fire segment continued to de-grow, registering a de-growth of 22.0% on account of pricing pressure.
“We expect the pricing to improve in the Fire segment in the coming months,” said Mantri.
The solvency ratio of the insurer was 2.36x as at December 31, 2024, compared to 2.65x as at September 30, 2024, and higher than the minimum regulatory requirement of 1.50x.
“On Solvency norms, the IRDAI had issued guidelines on inadmissibility of assets, which changes disallowance of receivables primarily from net basis to gross basis.Due to this, there is a reduction of ~30 basis points in our solvency ratio as at December 31, 2024; Consequently, our Solvency ratio was 2.36x as at December 31,2024.”
The General Insurance Council has represented the matter to the IRDAI, emphasizing the significant implications of this change on the solvency positions for the industry players, added Mantri.